Consideration takes place when there is an exchange

The orthodox view is that, performance of an existing duty should not constitute consideration. Discuss

Learning Outcomes:

? To show an understanding of what constitutes a consideration.

? To be able to identify the factors affecting the court's decision in the findings of 'consideration' in relation to performance of an existing duty.

Be able to give reasons for your approach.

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1.0 Introduction

Consideration is not recognized by the law since they are not 'value'. So, consideration takes place when there is an exchange, bargain or swapping which is the main characteristic of common law countries. So consideration is an exchange between the parties or a promise of such exchange. It is sometimes referred to as a 'something in return for something else'. A promise for nothing in return is often called a gratuitous promise.

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1.1 Body

1.1.1 Performance of an existing duty

According to the orthodox, the performance of an existing duty is not the consideration for the promise of new ones. Indeed, when the law is under contract, the judges consider being without valuable consideration, or when performance is one of the responsibilities of the party, then there is no advantage there should consider.

Similarly, the performance of an existing public or contractual duty cannot normally be offered as consideration. There are two types of the performance of an existing duty such as Domestic or social duty and Commercial or public duty

1.1.1.1 Domestic or Social duty

This duty is usually family friends or privacy problems.

In case of Thomas v Thomas [1842] 2 QB 851, 114 ER 330, P was the widow of J, who before his death had instructed his executors to convey to her a cottage for the rest of her life in return for a payment of '1 a year towards the ground-rent. This was a very small sum even in those days, and the executors' motive in agreeing was no doubt respect for J, but the court found there was an enforceable contract. The '1 a year was valuable consideration, and that was enough to complete the contract. In contrast, in case of Beswick v Beswick (1968) AC 58, Mr. Beswick sold his company to exchange with the nephew of payment of 6 pounds a week for him and 5 pounds per week to his wife for the rest of life, but once her husband died, his nephew has stopped making payments to her. Therefore, she tried to force his nephew to make payment in time. But it failed because the court stated that the only contract between husband and nephew, so there was not any consideration between her and her nephew.

Another case of Balfour v. Balfour [1919] 2 KB 571 is Mr. Balfour had promised to give his wife ' 30 a month for maintenance while he was out of life in Ceylon. Once he left, they separated and Mr. Balfour stopped payments. Mrs. Balfour brought an action to enforce payment. At the Court of Appeal, the Court held that there was no binding agreement because there was insufficient evidence to suggest that they intend to be legally bound by the promise. However according to the case of Merritt v. Merritt [1970] 2 All ER 760 CA, Mr. and Mrs. Merritt were divorced because of Mr. Merritt went to live with another woman. After that, Mr. Merritt has promised to pay 40 pounds per month and also entered into a written agreement that is used by him once promised, it was clearly the mortgage on their house, it would transfer home as his property, but failed to do so. The court distinguished the case from Balfour v. Balfour on the fact that Mr. and Mrs. Merritt, although still married, were separated at the time the agreement was made and therefore any agreement between them was made with the intention to create legal relations

1.1.1.2 Commercial or public duty

In the case of Stilke v Myrick [1809] 170 ER 1168, KB, when two members of his crew deserted, the captain of a ship promised other members of the crew that they would pay extra if they have completed travel. When the ship was reached in London, the owners have refused to honor the promise and it was felt he could not lawfully be implemented, because the sailors had done what they were already obliged to do by their employment contracts. Although Stilke v Myrick is cited as an authority in respect of the review, it appears that the public policy issue in the perceived need to exclude the very possibility of sailors in remote exerting coercive pressure to increase their reward was equally important. Thus, although the reason why the decision was a matter of public policy, its legal justification has been under consideration. Thus, in cases where a person was hired to do a duty, under an existing contract, that right could not be considered valid for a new contract. In contrast, the case of Hartley v Ponsonby [1857] 119 ER 1471, QB, the ship left England with a crew of 36, but as a result of desertions these were reduced to only 19, including just five able seamen, who were promised extra pay if they would help to sail the ship back to England. The court said this promise was enforceable: the crew was so reduced that it was dangerous to sail on and the captain would have had no right to demand it. The original contract had come to an end, and the seamen were free to make a new contract on whatever terms might be agreed.

In another case of Collins v Godefroy [1831] 109 ER 1040, KB, this case is where a duty imposed by law cannot be regarded as consideration in support of a contract. Godfrey Collins promised six guineas if he would attend court to testify on his behalf. Upon agreement, Collins was subpoenaed. Godfrey refused to pay. In his defense, he said there was no consideration from Collins as he was obliged to appear in court anyway. This view was upheld by the Court. However, the realization of a legal obligation in a manner that is "beyond the call of duty" can be considered. Also in case of Glasbrook v Glamorgan CC [1925] AC 270 HL, where during a strike at a coal mine, the mine owner has requested assistance from the police to protect the mine. The police suggested the provision of a mobile group of police; however the owner insisted that officers must live on the premises. For the owner promised to pay. Subsequently, however, the owner tried to deny any obligation to pay, claiming that the police were merely fulfilling their legal obligation to keep the peace. The House of Lords held that the provision of the population living in places went beyond what the police were forced to do so and therefore their actions amounted to the study valid

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1.3 Conclusion

In my opinion, the performance of an existing obligation may constitute consideration. When people make a promise, they should not make easy promises, no matter in what situation. Once the initiator has asked someone to do something in return for certain benefits, then this will constitute a direct test. Otherwise, we can consider as cheating, because the party was not fulfilling a promise. For instance, if the employer knows that the task is his/her employee's responsibility, he/she must not make a promise to his/her employee, or when he/she does, he/she must fulfill the promise because both of a binding contract between them and cannot breach of contract. In addition, if the performance of an existing obligation cannot be a consideration or any legal effect, the employer may abuse the service promises to use its employees to achieve the objective, because the employer knew they could not sue when there is no consideration under the implementation of an existing obligation, even if it does not fulfill the promise. And finally, it can cause employee morale goes down and it could affect self-image or reputation.?

2. Question 2

What are the general principles in the formation of a contract? What are the various forms of remedies available for a breach of contract? Give examples with cases.

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2.0 Introduction

The contract is a legally binding contract or relationship, or to abstain from performing certain acts exists between two or more parties. Contract law will be enforced between the parties of two or more legally binding exchange of promises can be defined as. Support received should be considered during the contract proposal forms will be made. Both parties involved must be determined and Freddie must be able to perform the type of legal problem, you can create a legal relationship. The contract may be oral rather than written in honor of the parties on its implementation in any way forced to lie between the other parties to mobilize a cross-reference format. The Day the formation of any contract agreement must be mutual understanding between the parties because the contract. All parties must agree and adhere to the terms and conditions of the offer.

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2.1 Body

2.1.1 The general principles in the formation of a contract

2.1.1.1 Offer

An agreement between two or more parties is constituted by a proposal and an acceptance of it. An offer is made when one person signifies to another his willingness to do abstain from doing anything, with a view to obtaining the assent of that other to such act or abstinence. For example A by offering to buy B's car for $10,000 in the hope that B will accept, is making an offer. According to section 2(b), 'when person to whom the proposal is said to be accepted.' Upon such acceptance by B, an agreement between the parties is created. The offer has become a 'promise' and the party making the offeror is now referred to as the 'promisor' and the party accepting the offer, the 'promisee'. Thus B's car establishes an agreement or promise. A is the promisor and B the promise.

2.1.1.2 Acceptance

Accepting an offer is the final sanction and without reservation to the duration of the offer. Acceptance is whether verbal or written shall communicate to the offeror before the contract must be executed. There are some rules of acceptance.

As regards postal acceptance rule is complete when the letter is displayed or the telegram is communicated to a person authorized to receive for transmission to the address. Despite the postal acceptance rule as explained above acceptance in the form of e-mail, fax or telegram must be communicated to the offeror of a binding contract. If the terms of counter offer are altered it is amount to a counter offer.

If an offeree makes request for further information with regarding the products or services that will not return for a counter offer, but a simple investigation.

"An asset conditional on an offer is not accepted the offer ... the use of "subject to contract" phase in response to a conditional offer is an asset which means that the target company is saying that his assent to the terms of the offer is conditional appoint a formal contract in the course of development. There is an acceptance that does not say a "market of the object." Once the acceptance has been communicated cannot be removed, but an offer may be revoked at any time before it is accepted.

2.1.1.3 Intention to create legal relations

In contract law, intention to create legal relations is intended to screen the cases that are not really appropriate for a lawsuit. Any agreement led to a contract that can be applied by the courts. For example A has an agreement to meet a friend in a cinema. A can have an ethical duty to honor that agreement but not a legal obligation to do so. It is because in general the parties to these agreements do not intend to be lawfully responsible and the law is planned to reflect the will of the party. To determine which agreements are lawfully binding and have the intention to create legal relations, the law draws a difference between social and national agreements and agreements in a commercial context.

2.1.1.4 Consideration

According to Sir Frederick Pollock, consideration is patience of a party or that promise is an act of buying the person's appointment is in effect the value of the promise thus given the price. Paid or the supply of goods or services in exchange for promising to pay consideration to the configuration of the most common form. Contract customers pay the price later if someone is a commitment to free care, for example, perhaps the executor of the executive, the two parties agreed to consider.

2.1.2 Breach of contract and Remedies

A contract, being a fountainhead of a correlative set of rights and obligations for the parties, would be of no value, if there were no remedies to enforce the rights arising there under. The party committing breach of contract is called the 'guilt party' and the other party is called the 'injured' or 'aggrieved' party. In case of breach of contract, the aggrieved party would have one or more, but not all, of the following remedies against the guilty party. The remedies are damages, rescission, specific performance, injunction and restitution.

2.1.2.1 Damage

The most important remedy available law for breach of contract is an award of damages. This is a financial sum fixed by the court to make compensation the injured party. In order to recover substantial damages the innocent party must show that he has suffered actual loss; if there is no actual loss he will only be entitled to nominal damages in recognition of the fact that he has a valid cause of action. The Case is Hadly v Baxendale(1854) 9 Ex 341

2.1.2.2 rescission

Breach of contract does not release the contract in question, but the aggrieved party may sometimes need to address the court to grant him formal cancellation, namely the cancellation of the contract. This will allow it to be free of its own obligations under the contract. Example case is Colbum v Plate (8131) 8 Bing 14, 131 ER 305

2.1.2.3 Specific performance

There are several options available to the court for breach of contract. Specific performance is exceptional and ordered when damages would be "inadequate." With land contracts, but courts have much more direct authority and specific performance is the most practical remedy for breach of land contracts. The court should order the party failing to perform an end to its market share, if possible, given the nature of contracts and the irreplaceable character of the goods or services covered, and the court's ability to execute such an order. This type of action was called "coercive" and clearly intended to get the party failing to fulfill their obligation. There is also a creation of equity which means it is very much a discretionary power of the court and is subject to the principles of equity, especially one who says that "he who comes to equity must have clean hands.' If the performance requires a specific judicial review, the court will be reluctant to order it. A court will not be for a singer to perform against his will, even if not doing so is a breach of contract. No more than a performance of a specific court order for non-specific products such as "grain" or "oil" because they can be replaced, but perhaps a higher price.

Case of specific performance is Mennonite Land Sales Co. Ltd. v. Friesen (1921). In this case, the execution has been requested by a court where the defendant had violated a contract for the sale of the crop. The court refused, since the products are not "so unique or special character that the compensation money is not enough."

2.1.2.4 Injunction

An injunction is another coercive legal remedy which can be used in certain cases of breach of contract in case of a direct order is necessary to adopt some of the prosecution of a continuing violation such as abuse of rented premises. A distinction of coercive remedies like specific performance and injunctions is that the failure of the defendant to comply, resulting in a form of defiance of a court order and gives access weapons applicant public performance such as a fine or imprisonment.

2.1.2.5 Restitution

Unlawful act or to cancel the contract due to be returned to its original state, there will be an obligation that the tuition contract with a contract to return to the state is called restitution. For restitution or recovery as can be known in a number of different decision criteria to how this decision is a big criteria. The type of event that causes when you pay the verdict may be the subject of controversy, and the criteria for the degree is the biggest factor. The case is Attomey General v Blake(2001)1 AC 268

3.0 Conclusion

Contract law has saving its importance in the business. It facilitates the distribution of risks and regulates commercial practices, providing a favorable environment for business transactions. The general principles of the formation of a contract include offer, acceptance, intention to create legal relations and consideration

When a party is in breach of its contractual duties, remedies available to the other will depend in part on the seriousness of the violation. An action for damages is possible in almost all cases, and in some cases, an order of specific performance, but where the severity of the breach to the innocent party may prefer to abandon the contract altogether. There is also the possibility of termination in certain cases of error or misrepresentation

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